14 May 2018, Sweetcrude, Houston, Texas — The local and international financial market products and services update.
NIGERIA: Capital inflow into Nigeria rose almost six-fold in the first quarter compared to a year ago, following last year’s liberalisation of the currency for foreign investors and steps to tighten liquidity to attract offshore funds. Figures released on Friday by the National Bureau of Statistics showed capital inflow had hit $6.3 billion in the quarter, dominated by offshore portfolio investors buying local shares and bonds rather than foreign direct investment. Capital imports have been growing especially as economic activity gains pace after Nigeria emerged from a recession last year. They rose for the fourth straight quarter since the second quarter of 2017. Portfolio investment has been rising faster than direct investment which is still weak.
FX: Last week, Naira closed the week in the 360 – 362 levels with flows more or less matched. Market chatter also suggests that the CBN is steadfast in its resolve to support the local unit by meeting the FX demand flowing through the I&E window. Last week, the daily average turnover in the window stood at $261.12m and traded a high of $/N 363; 50kobo lower than the previous week. Wholesale Auction expected to be announced today.
FIXED INCOME: Locals sought to fund for Friday’s FX retail auction, selling more bills amidst tight liquidity (cN128bn before retail debits).
With the wholesale auction expected today, liquidity will tighten further until OMO maturities on Thursday provide some relief to the market.
The bond market was skewed to the sellers as well for same reason.
There will be a bill auction on Wednesday 16th with N34bn on offer across the 91, 182 and 365-day bills
U.K: The Bank of England may get help tackling its diversity problem this summer.
The departure of Ian McCafferty in August opens up the first slot on the Monetary Policy Committee in a year and gives the U.K. government, which makes the appointments, the chance to name a woman to improve the gender balance among top officials. And then there is the question of who replaces BOE Governor Mark Carney, whose six-year term ends next June.
Silvana Tenreyro is currently the only woman on the nine-member MPC, and only the eighth to serve on the rate-setting panel in its 21-year history
U.S: President Donald Trump ordered the U.S. Commerce Department to get ZTE Corp. back into business, weeks after cutting off the massive Chinese telecom equipment maker from its U.S. suppliers with a condemnation of ZTE’s “egregious” behavior.
Trump said in a Sunday morning tweet, posted minutes after arriving at his golf course in Virginia, that he and Chinese leader Xi Jinping are working together to give ZTE “a way to get back into the business, fast.”
COMMODITIES: Oil held losses below $71 as OPEC signalled it has enough spare capacity to mitigate any impact on markets even if renewed U.S. sanctions on Iran curbs exports from the group’s third-largest producer.
Futures in New York fell as much as 0.5% after sliding 0.9% Friday. Three members of the Organization of Petroleum Exporting Countries — Saudi Arabia, Kuwait and the United Arab Emirates — together have enough capacity to act as a cushion, the U.A.E. energy minister said. Meanwhile, Iran called for clarity over its nuclear deal with world powers, following U.S. President Donald Trump’s withdrawal from the 2015 pact.
Macro Economic Indicators
Inflation rate (Y-o-Y) for March 2017 13.34%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at May 10, 2018, 47,865
Money Market Highlights
30 Day 14.5038
90 Day 15.4722
180 Day 16.6721
USD 1 Month 1.91871
USD 2 Months 2.08652
USD 3 Months 2.34250
USD 6 Months 2.51500
USD 12 Months 1.72400
Benchmark Yields Tenor Maturity Yield (%)
91d 16-Aug-18 13.83
182d 08-Nov-18 14.02
364d 04-Apr-19 14.13
2y 13-Feb-20 13.25
3y 15-Jul-21 13.48
5y 27-Jan-22 13.48
Indicative Currency Exchange Rates
USDNGN (I&E) 359.00 360.00
EURUSD 1.2207 1.2410
GBPUSD 1.3476 1.3961
USDJPY 109.53 109.75
GBPEUR 1.1328 1.1538
USDZAR 12.5494 12.7532
EURNGN 426.80 427.44
GBPNGN 487.08 490.50